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Are we all global now? Local vs. foreign sources of corporate competence: the case of the Japanese pharmaceutical industry
Author(s) -
Thomas L. G.
Publication year - 2004
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.420
Subject(s) - diversification (marketing strategy) , business , competence (human resources) , industrial organization , first mover advantage , pharmaceutical industry , marketing , market economy , economics , management , medicine , pharmacology
This study links the highly distinctive national contexts of the pharmaceutical industry to the evolution of innovative capabilities for Japanese drug firms from 1975 to 1995. During these two decades, the Japanese domestic environment for pharmaceuticals changed radically, encouraging a ‘bubble’ of trivial innovations. Experience by Japanese firms in their domestic market predominantly determined their innovative capabilities, pushing these firms towards trivial innovation. Corporate experience in the socially ‘proximate’ markets of Southern Europe served as a strategic complement for significant innovation by Japanese drug firms, and thus as a partial counterweight to the home market. Unfortunately, corporate diversification was a strategic substitute for significant innovation, and many Japanese drug firms are significantly diversified. The resulting degradation of innovative capability for Japanese drug firms has locked most of them into an increasingly unattractive home market. Copyright © 2004 John Wiley & Sons, Ltd.